Blockchain eyed for palm oil

Blockchain eyed for palm oil

The Energy Ministry has ordered the Energy Business Department to discuss with Thai oil traders the prospect of using blockchain to facilitate palm oil trade.

A blockchain system would cut out the middleman between palm planters and palm oil mills, in theory allowing planters to sell the commodity at higher prices.

Energy Minister Sontirat Sontijirawong said the ministry expects to implement a blockchain system in June as a relief measure for planters struggling with low, unstable palm prices. He declined to elaborate on the details.

"The government is trying to control domestic palm oil prices and raised the content of blended biofuel gasoline to 10% [B10] and 20% [B20] in April 2019 to absorb the surplus volume of crude palm oil [CPO] and keep the price of fresh palm nuts above three baht per kilogramme," he said.

The ministry expects the country to produce 2.2 million tonnes of CPO this year.

Currently planters sell palm nuts, the raw material used to make palm oil, at 2.70 baht per kg to middlemen. But the real cost of palm nuts should be 3.50 baht per kg, said planters.

The ministry plans to mandate B10 as a primary diesel, replacing B7 in 2020, while B20 is planned as an alternative diesel with subsidised prices.

Previously, the ministry ordered the Electricity Generating Authority of Thailand (Egat) to use CPO for power generation at the Bang Pakong power plant in Chachoengsao province.

Egat agreed to purchase two batches of CPO. The first completed purchase agreement was for 160,000 tonnes and the second order of 200,000 tonnes is still being processed.

Both measures have increased the price of fresh palm nuts to 3.20 baht per kg since mid-June 2019, from 1.80 baht in April last year.

Mr Sontirat said the outbreak affected consumption of palm oil for cooking and biofuel, especially B100 in April, decreasing by 400,000-500,000 litres per day from March.

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